JM Financial has initiated coverage on Adani Energy Solutions Ltd. with a buy rating and a bullish target price, citing strong growth levers. The target price of Rs 1,199 indicates an upside potential of 23% over the previous close.
The company is strongly positioned to benefit from India's electricity transmission and distribution growth story, analysts said. Growth will be supported by a robust Rs 77,800 crore transmission order book, 24.6 million smart metering portfolio and a stable distribution franchise with a regulated asset base of Rs 9,600 crore.
The brokerage estimates revenue, operating income (Ebitda) and net profit would compound at 19%, 15% and 50% over the next three years.
AESL is the country's largest private transmission company, with a presence across 16 states of India and a cumulative transmission network of more than 26,600 ckm and 93,200 MVA transformation capacity. In its distribution business, AESL serves more than 12 million consumers in the Mumbai region and the industrial hub of Mundra SEZ.
The Adani Group company is ramping up its smart metering business and is on course to become India's leading smart metering integrator with an order book of over 22.8 million meters.
Adani Energy Solutions share price has gained nearly 50% in the last 12 months. All 10 analysts tracking the stock have a 'buy' rating, according to Bloomberg data. The average of 12-month analyst price targets is Rs 1,143, which implies a potential upside of 18%.
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